FISCAL NOTE
Date Requested: February 13, 2018
Time Requested: 04:18 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1260 |
Comm. Sub. |
SB83 |
|
|---|
| CBD Subject: |
Education (Higher) |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to require that higher education course catalogs include certain information relating to employment rate, compensation, etc. to help students decide on an area of study; to create a voluntary college completion incentive program whereby an institution of higher education accepts less state funding in return for certain incentive bonuses relating to student graduation and employment of graduates; and to create a tax credit for West Virginia resident students successfully completing certain courses of study.
According to our interpretation, the proposed bill would allow a tax credit of $1,000 for college graduates who complete a two-year, four-year, or post-graduate degree program. To qualify, the degree must have been completed at an institution participating in the Voluntary College Compensation Incentive Program and the student must continue to reside in West Virginia. Qualifying students may receive up to three credits for completing qualifying degree programs, for a lifetime potential credit cap of $3,000, and may carryover unused credit for up to 10 years. The credit is nonrefundable and nontransferable. This analysis does not attempt to quantify the additional provisions related to the Voluntary College Completion Incentive Program and a corresponding fund to be administered by the Vice Chancellor for Administration of the Higher Education Policy Commission.
Based on our understanding, the proposed bill would result in a loss to General Revenues of roughly $8.7 million per year upon full implementation. We note that, among the conditions that must be met to qualify for the credit, the proposed bill requires that “the course of study was completed at an institution participating in the Voluntary College Completion Incentive Program…at the time the student began the course of study.” As this Program would be created as part of this legislation, it is unlikely the credit would be claimed in the near term.
Additional administrative costs incurred by the State Tax Department would be $51,000 in the first year of implementation and $35,000 per year for each year thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2018
Increase/Decrease
(use"-") |
2019
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
35,000 |
| Personal Services |
0 |
0 |
35,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
-8,700,000 |
Explanation of above estimates (including long-range effect):
According to our interpretation, the proposed bill would allow a tax credit of $1,000 for college graduates who complete a two-year, four-year, or post-graduate degree program. To qualify, the degree must have been completed at an institution participating in the Voluntary College Compensation Incentive Program and the student must continue to reside in West Virginia. Qualifying students may receive up to three credits for completing qualifying degree programs, for a lifetime potential credit cap of $3,000, and may carryover unused credit for up to 10 years. The credit is nonrefundable and nontransferable. This analysis does not attempt to quantify the additional provisions related to the Voluntary College Completion Incentive Program and a corresponding fund to be administered by the Vice Chancellor for Administration of the Higher Education Policy Commission.
Based on our understanding, the proposed bill would result in a loss to General Revenues of roughly $8.7 million per year upon full implementation. We note that, among the conditions that must be met to qualify for the credit, the proposed bill requires that “the course of study was completed at an institution participating in the Voluntary College Completion Incentive Program…at the time the student began the course of study.” As this Program would be created as part of this legislation, it is unlikely the credit would be claimed in the near term.
Additional administrative costs incurred by the State Tax Department would be $51,000 in the first year of implementation and $35,000 per year for each year thereafter.
Memorandum
The stated purpose of this bill is to require that higher education course catalogs include certain information relating to employment rate, compensation, etc. to help students decide on an area of study; to create a voluntary college completion incentive program whereby an institution of higher education accepts less state funding in return for certain incentive bonuses relating to student graduation and employment of graduates; and to create a tax credit for West Virginia resident students successfully completing certain courses of study.
The proposed bill does not specify how long after a degree is obtained the Taxpayer must live in West Virginia to claim the credit. Additionally, the bill does not address the situation of individuals seeking the credit and required to provide a “job title” who are not employed.
The proposed bill refers to “[t]he percentage of graduates employed in West Virginia in that field of study within twelve months” but does not define “employed,” which could refer to full-time, part-time, or temporary employment.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov